Ultime notizie per ProShares UltraShort S&P500 (ARCA:SDS)

ProShares UltraShort S&P500

The Fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the Daily Target. The Index is constructed and maintained by S&P Dow Jones Indices LLC. The Index is a measure of large-cap U.S. stock market performance. It is a market capitalization-weighted index of 500 U.S. operating companies and real estate investment trusts selected through a process that factors in criteria such as liquidity, price, market capitalization, financial viability and public float.

S.D. Standard ETC PLC

American Century Short Duration Strategic Income ETF

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Suspect Detection Systems Inc

Stardust Power Inc

South Dakota Soybean Processors LLC

The market just slipped through what JPMorgan&#8217;s Jason Hunter calls a "fork in the road" — only this time, it&#8217;s more like tumbling through a black hole. Hunter says the recent U.S. trade policy surprise pushed <a href="https://www.benzinga.com/topic/s-p-500">the S&amp;P 500</a> index below a critical level near 5500, triggering what could be an accelerated pricing of recession risks.
<h1 class="wp-block-heading">Key Support Breached – Now What?</h1>
Hunter highlights that the S&amp;P 500 didn't just tiptoe past support — it gapped straight through 5500, dipped through the mid-5300s and now hovers near a major support zone in the low 5100s.
He believes a bounce is possible from here, but don't bet the house on it. "We suspect the market can stage a bear market rebound&#8230; but believe that lift will be contained and potentially short-lived unless the news flow sees a dramatic change," he warns.
Read Also: <a href="https://www.benzinga.com/markets/equities/25/04/44660697/how-to-protect-against-a-1987-style-s-p-500-crash-scenario">How to Protect Against A 1987-Style S&amp;P 500 Crash Scenario</a>
<h1 class="wp-block-heading">The Yield Curve Has Its Own Drama</h1>
In the bond world, the 2-year Treasury note flirted with resistance at 3.48%-3.55% before backing off. Hunter now sees a ceiling at 3.825%-3.85%, but expects an eventual bullish breakout — translation: yields may start rising again soon.
<h1 class="wp-block-heading">How To Play It</h1>
For those looking to trade this technical twist, ETFs like the SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), which tracks the S&amp;P 500, or the ProShares UltraShort S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SDS#NYSE">SDS</a>), leveraged inverse ETF for the S&amp;P 500, offer exposure. If you're watching yields, the iShares 1-3 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHY#NASDAQ">SHY</a>), a 1–3 Year Treasury ETF, or the iShares 3-7 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEI#NASDAQ">IEI</a>), a 3–7 Year Treasury ETF, could be in focus.
The bottom line? 
The S&amp;P 500 just slipped past a critical technical threshold, and while a short bounce may lure some in, Hunter's charts are flashing caution. Don&#8217;t mistake this for a reset — it&#8217;s more likely the eye of the storm.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/news/econ-s/25/04/44669291/sp-500-officially-sinks-into-bear-market-heres-what-investors-need-to-know">S&amp;P 500 Officially Sinks Into Bear Market: Here&#8217;s What Investors Need To Know</a></li>
</ul>
Photo: Shutterstock

Broad U.S. Equity ETFs

Technicals

Trading Ideas

ETFs

iShares Trust Barclays 1-3 Year Treasury Bond Fund

S&P 500 Slips Through The Cracks, Analyst Spots Short-Lived Bounce Before Gravity Kicks In

Each week,&nbsp;Benzinga&#8217;s Stock Whisper Index&nbsp;uses a combination of proprietary data and pattern recognition to showcase five stocks just under the&nbsp;<a href="https://www.benzinga.com/topic/stock-whisper-index" target="_blank" rel="noreferrer noopener">surface and warrant attention</a>.
Investors are constantly on the hunt for undervalued, under-followed and emerging stocks. With countless methods available to retail traders, the challenge often lies in sifting through the abundance to&nbsp;uncover new information.
This index layers editorial commentary to help make sense of why these stocks should be of interest and whether investors or casual readers should watch them.
Here is a look at the Benzinga Stock Whisper Index for the week of&nbsp;Feb.&nbsp;23:
Mastercard Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MA#NYSE">MA</a>): The credit card company saw increased interest from investors likely related to the <a href="https://www.benzinga.com/m-a/24/02/37204534/capital-one-set-to-acquire-discover-in-landmark-35-3b-deal">$35 billion takeover of</a> Discover Financial Services (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFS#NYSE">DFS</a>) announced by Capital One Financial Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COF#NYSE">COF</a>). 
The acquisition could cause headwinds for Mastercard and Visa Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/V#NYSE">V</a>), which are leaders in the credit card market. Capital One uses Visa and Mastercard for its credit cards and recently renewed partnerships. After the partnerships end, Capital One could transition to Discover and away from Visa and Mastercard. 
Visa shares also saw increased interest from Benzinga readers according to proprietary data.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/37218624/why-capital-one-discover-merger-is-a-threat-to-visa-mastercard-creation-of-new-cred">Why Capital One-Discover Merger Is A Threat To Visa, Mastercard: Creation Of New Credit Card Giant</a>
Lululemon Athletica Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LULU#NASDAQ">LULU</a>): The apparel company joins the index with increased interest from readers likely due to a ratings update from Needham. The Buy rating and the price target of $525 were reiterated by Needham and come in ahead of the recent price of $455 and the 52-week high of $516.39.
The company is expected to report fourth-quarter financial results in March. In<a href="https://www.benzinga.com/news/earnings/23/12/36143318/lululemon-q3-earnings-overview-eps-beat-revenue-beat-comps-up-13-1b-buyback-and-more"> the third quarter</a>, Lululemon beat Street consensus estimates for both revenue and earnings per share. The company said it was pleased with the early performance of the holiday season in the fourth quarter. Shares of the apparel company are up over 40% in the past year, but remain down around 11% year-to-date in 2024.
Super Micro Computer (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMCI#NASDAQ">SMCI</a>): The technology company is carried over from last week&#8217;s Stock Whisper Index. Super Micro Computer is one of the fastest-gaining stocks in recent weeks and shares are up over 1,000% in the past year. 
Analysts have been sharing increased price targets as the stock continues higher. After a pullback from highs, Super Micro shares saw a +33% gain on Thursday, <a href="https://www.benzinga.com/news/earnings/24/02/37262009/whats-going-on-with-super-micro-computer-stock-thursday">likely due to peer company</a> NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) reporting strong fourth-quarter earnings and seeing shares up. Super Micro recently announced that it is expanding its portfolio of AI solutions.
Adobe Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADBE#NASDAQ">ADBE</a>): The content creation company saw shares fall early in the week potentially related to ChatGPT parent OpenAI <a href="https://www.benzinga.com/general/entertainment/24/02/37185214/here-are-some-of-the-most-stunning-videos-from-openais-new-sora-video-tool">releasing teaser trailers</a> for is text-to-video tool Sora. The release of Sora expands the artificial intelligence capabilities that users of OpenAI can have at their fingertips. 
Several Adobe products are used by people to create images and videos and the new OpenAI tools may see users move over to the rival. Adobe reports first-quarter financial results in mid-March and may be asked for more details on the potential competition by analysts.
Short S&amp;P 500 ETFs: When looking at the proprietary data used to construct the Stock Whisper Index, ETFs also show up many times with increased interest from readers. ETFs are generally left off the index unless something big jumps out, which is the case this week with two (Benzinga is giving you a bonus Stock Whisper pick this week) S&amp;P 500 inverse ETFs seeing elevated interest. 
The ProShares UltraShort S&amp;P 500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SDS#NYSE">SDS</a>) and ProShares Short S&amp;P 500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SH#NYSE">SH</a>) inverse ETFs both saw increased interest. The funds seek to offer performance that is the inverse of the S&amp;P 500 index or in the case of the UltraShort ETF, two times the performance of the S&amp;P 500.
Increased interest in the inverse S&amp;P 500 indexes comes as the index and the tracking ETFs like the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)<a href="https://www.benzinga.com/markets/equities/24/02/37020083/s-p-500-hits-5-000-milestone-yet-concerns-of-overvaluation-versus-its-equal-weight-counterpart-m"> hit record highs </a>and the index passed the 5,000 milestone. 
Benzinga previously shared that the performance of the Magnificent 7 stocks has made up a large portion of the S&amp;P 500 Index gains and the performance of the index is widely outpacing S&amp;P 500 ETFs that are equally weighted. Investors may think that a pullback in the S&amp;P 500 is coming given the increased interest in inverse ETFs.
Stay tuned for next week&#8217;s report, and follow Benzinga Pro for all the latest headlines and<a href="https://pro.benzinga.com/feature/newsfeed/?gspk=bHVrZWphY29iaTUzNDg&amp;gsxid=tdEE0VrK8Jeg&amp;ref=lukejacobi5348" target="_blank" rel="noreferrer noopener">&nbsp;top market-moving stories here.</a>
Read the latest Stock Whisper Index reports here:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/01/36701141/benzingas-stock-whisper-index-5-stocks-investors-secretly-monitor-but-dont-talk-abo" target="_blank" rel="noreferrer noopener">Jan. 19</a>
<a href="https://www.benzinga.com/general/biotech/24/01/36804956/benzingas-stock-whisper-index-5-stocks-investors-secretly-monitor-but-dont-talk-about-yet-donald-" target="_blank" rel="noreferrer noopener">Jan. 26</a>
<a href="https://www.benzinga.com/exclusives/24/02/37040817/benzingas-stock-whisper-index-5-stocks-investors-secretly-monitor-but-dont-talk-about-yet" target="_blank" rel="noreferrer noopener">Feb. 9</a>
<a href="https://www.benzinga.com/top-stories/24/02/37186215/benzingas-stock-whisper-index-5-stocks-investors-secretly-monitor-but-dont-talk-about-yet">Feb. 16 </a>
Read Next: <a href="https://www.benzinga.com/news/earnings/24/02/37247922/nvidia-q4-earnings-highlights-revenue-beat-eps-beat-q1-guidance-and-more">Nvidia Q4 Earnings Highlights: Revenue Beat, EPS Beat, Q1 Guidance And More</a>

Education

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SMCI

Benzinga's 'Stock Whisper' Index: 5 Stocks Investors Secretly Monitor But Don't Talk About Yet

News

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SQQQ

SRTY

ProShares ETFs REK, REW, SKF Trading Thursday Following Effect of 1:2 Reverse Stock Split; DUG, DXD, SBM, SDS, SQQQ, SRTY Trading Foll0owing Effect of 1:5 Reverse Stock Split

If the market goes down, there&#39;s an easy way to profit.
Many investors think the market is overvalued and they may be correct. At 2.9, the price to sales ratio of the S&amp;P 500 is the highest that it has been in at least two decades. By this measure at least, the market is overvalued.
Bearish investors should consider inverse ETFs as a way to protect themselves from, and even profit, if the market heads lower. These ETFs use complicated strategies to inversely mirror the market, but they trade as regular ETFs or stocks. This means average investors don&rsquo;t need to be concerned with the mechanics.
See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/21/04/20798047/heres-why-stock-valuations-are-still-quite-reasonable">Here&#39;s Why Stock Valuations Are Still &#39;Quite Reasonable&#39;</a>
The ProShares Short S&amp;P500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sh#NYSE">SH</a>) moves in the opposite direction of the S&amp;P 500 Index. If the index is down 1%, this ETF should move higher by about 1%.
<img alt="sh_0.png" src="https://www.benzinga.com/files/u344550/sh_0.png" style="height:400px; width:640px" />
The ProShares UltraShort S&amp;P500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sds#NYSE">SDS</a>) is a leveraged inverse ETF. It will make an inverse move that is twice the move of the S&amp;P 500. If the Index is down 1%, this ETF will be up by about 2%.
<img alt="sds.png" src="https://www.benzinga.com/files/u344550/sds.png" style="height:400px; width:640px" />
The ProShares UltraShort S&amp;P500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spxu#NYSE">SPXU</a>) is highly leveraged. It will move three times the amount of the S&amp;P move in the opposite direction. If the S&amp;P 500 drops by 1%, SDS will appreciate by 3%.
<img alt="spxu.png" src="https://www.benzinga.com/files/u344550/spxu.png" style="height:400px; width:640px" />

Specialty ETFs

SPXU

3 ETFs That Will Go Up If The Market Goes Down

TQQQ

Hearing Vanguard To Bar Trading Of Leveraged And Inverse ETF Products

The S&amp;P 500 is up 10 percent this year and with the benefit of 1.4 percent gain over the past week, the benchmark U.S. equity index continues pushing to record highs.
Sounds like a recipe for trouble for traders that have been long inverse or, worse yet, inverse leveraged exchange traded funds that profit from declines in U.S. stocks.
Rising U.S. stocks are chasing traders from bearish products such as the ProShares UltraShort S&amp;P500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>). SDS, one of the largest inverse ETFs trading in the U.S., attempts to deliver double the daily inverse performance of the S&amp;P 500. So if the S&amp;P 500 falls by 1 percent on a given day, SDS should rise by 2 percent.
&ldquo;We have seen some substantial redemption flows lately in a levered Bear fund that we have profiled here from time to time known as SDDs, where over $1 billion has left the fund,&rdquo; said <a href="http://streetonefinancial.com/">Street One Financial</a> Vice President Paul Weisbruch in a note out Tuesday. &ldquo;This move comes as the SPX itself has been trading if not threatening new all-time highs lately. &ldquo;SPX reached 2463.54 reached on an intraday basis last Friday before some regression back to present levels in stocks. This could be profit-taking in the fund, and someone expressing a view that perhaps being short here has little upside going into core earnings season.&rdquo;
<h3>
	Where Money Is Flowing</h3>
With the Nasdaq Composite continue to ascend to record highs, it stands to reason that investors would be attracted to the related ETFs. As Weisbruch points out, the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ: <a class="ticker" href="/stock/qqq#NASDAQ">QQQ</a>) has recently been hauling in new money in a big way.
To be precise, QQQ, which tracks the Nasdaq-100 Index, has added more than $3.3 billion in new assets over just the past week, <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/flow-trend-tracker">according to issuer data</a>.
With QQQ ringing up new highs, active traders have been putting new money to work with the ProShares Ultra QQQ (ETF) (NYSE: <a class="ticker" href="/stock/qld#NYSE">QLD</a>). QLD is designed to deliver double the daily returns of the Nasdaq-100 Index.
<h3>
	Earnings Impact</h3>
QQQ has been boosted by big-name earnings reports, such as Monday&#39;s report from Netflix, Inc. (NASDAQ: <a class="ticker" href="/stock/nflx#NASDAQ">NFLX</a>), but the ETF allocates about 80 percent of its combined weight to the technology and consumer discretionary stocks, so as more marquee names from those sectors step into the earnings confessional, QQQ could rise some more.
Related Stories:
<a href="https://www.benzinga.com/news/earnings/17/07/9776823/tech-etfs-are-still-tempting">Tech ETFs Still Tempt</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/07/9766256/an-etf-for-the-fang-group-arrives">A FANG ETF Arrives</a>
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Long Ideas

Short Ideas

NFLX

Traders Bail On This Leveraged ETF As Earnings Roll In

Seabreeze Partners President Doug Kass Tweets: @jimcramer RealMoneyPro: At my highest net short exposure of the year. Revolutionaries, join the SDS! $SDS

It is often said that investors are born with a bullish bias and that bias must be unlearned through experience. No medical doctors or psychologists are behind the writing of this piece, but if they were, they would probably say there is a part of the human brain that enjoys rooting for good outcomes and against outcomes perceived as poor.
A simple explanation to be sure, but it sheds some light on why most investors and traders are &ldquo;long only&rdquo; and why, perhaps until just the past few years, short sellers were viewed as investing pariahs. This line of thinking has long applied to leveraged exchange-traded funds where &ldquo;what goes down must go up&rdquo; thinking has consistently led to more money going into leveraged bull funds <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5984991/gold-miners-etfs-are-getting-smoked">over their bearish rivals</a>.
<h3>A Little About Leverage</h3>
Indeed, it is rare that leveraged bear ETFs pull in more cash than their bull counterparts, but that is what has been happening in recent months.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/04/7903575/something-to-gush-about-with-this-leveraged-etf">Something To Gush About With This Leveraged ETF</a></bzrelatedlink>
&ldquo;Since the end of February, investors who use leveraged exchange-traded funds have sent $1.3 billion into exchange-traded notes that pay two or three times the inverse of the market&rsquo;s return, meaning they go up when stocks fall. So big have been the inflows that the market capitalization of inverse products is on the verge of eclipsing bullish notes for the first time since 2013,&rdquo; according to <a href="http://www.bloomberg.com/news/articles/2016-05-11/hardcore-bear-etfs-poised-to-swell-past-bulls-as-inflows-surge">Bloomberg</a>.
The Bloomberg article noted money has been pouring into the ProShares UltraShort S&amp;P 500 (ETF) (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>) and the ProShares UltraPro Short S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spxu#NYSE">SPXU</a>) since February. The two ETFs have added a combined $1.43 billion since February. SDS attempts to deliver double the daily inverse returns of the S&amp;P 500 while SPXU seeks to deliver triple the daily inverse returns of the benchmark U.S. equity index.
Other data confirm traders&#39; increased in leveraged bear ETFs. For the five days ended May 10, six of the 10 Direxion ETFs with the largest volume spikes were leveraged bear funds, <a href="http://www.direxioninvestments.com/wp-content/uploads/2014/03/Direxion-Daily-ETF.pdf?utm_campaign=Daily%20Performance%20Email%20051016&amp;utm_medium=email&amp;utm_source=Eloqua&amp;elqTrackId=151d53321b1442f3a9fc0e16cfea2683&amp;elq=5826118c9e4f4bbb966b6c2e414620c7&amp;elqaid=2264&amp;elqat=1&amp;elqCampaignId=1455">according to issuer data</a>. Direxion is the second-largest issuer of inverse and geared ETFs.
<h3>Other Names</h3>
For the 30-day period ended May 10, the Direxion Daily Large Cap Bear 3X Shares (NYSE: <a class="ticker" href="/stock/spxs#NYSE">SPXS</a>), another triple-leveraged bearish play on the S&amp;P 500, averaged daily inflows of almost $3.5 million. The Direxion Daily Small Cap Bear 3X ETF (NYSE: <a class="ticker" href="/stock/tza#NYSE">TZA</a>), which tries to deliver triple the daily inverse returns of the Russell 2000, saw inflows of over $3 million per day over that period. Direxion&#39;s equivalent bull ETFs averaged daily outflows over that time.

SPXS

An ETF Rarity: Leveraged Bear ETFs Hauling In More Cash Than Bull Rivals

No genre of exchange-traded fund comes with caveats, warning labels and controversy that accompany inverse and leveraged ETFs, but that is not stopping traders from pouring capital into these products.
 In fact, the recent dose of volatility digested by market participants during the third quarter stoked fresh inflows to inverse and leveraged ETFs.
<h3>Inverse And Leveraged ETFs = $70.1 Billion</h3>
At the end of the third quarter, the combined assets under management across the world&#39;s inverse and leveraged ETFs was $70.1 billion, a 14.4 percent year-to-date increase, according to data from <a href="http://www.boostetp.com/">Boost ETP</a>, a unit of WisdomTree, the fifth-largest U.S. ETF sponsor.
The data indicate that traders are not shy about using leverage, as 54 percent of the assets held by inverse and leveraged ETFs are allocated to those funds that are either double- or triple-leveraged.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5906762/how-to-use-leveraged-etfs-to-beat-the-fed">How To Use Leveraged ETFs To Beat The Fed</a></bzrelatedlink>
	&ldquo;In terms of S&amp;L asset allocation, equity ETPs are the most popular with 72 percent of AUM, followed by debt with 12 percent and commodities with 9 percent. The remainder is allocated between currency and alternative ETPs,&rdquo; said Boost.
 &ldquo;Currently there is $50.7 billion of AUM held in S&amp;L equity ETPs, an increase of 15 percent YTD. 63 percent of equity ETPs globally are held in leveraged (long) ETPs, 37 percent in short ETPs.&rdquo;
<h3>Beyond Equities: Other Asset Classes</h3>
Although equities are the dominant asset class among leveraged ETFs, select bond funds have been embraced by traders as ways of betting on the Federal Reserve <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5906762/how-to-use-leveraged-etfs-to-beat-the-fed">raising interest rates</a>.
 For example, the Direxion Daily 20 Year Plus Treasury Br (NYSE: <a class="ticker" href="/stock/tmv#NYSE">TMV</a>) has added nearly $206 million in new assets this year. TMV is designed to deliver triple the daily inverse performance of the NYSE 20 Year Plus Treasury Bond Index (<a href="https://www.google.com/finance?q=INDEXNYSEGIS%3AAXTWEN&amp;ei=HoQqVpGtC8aqjAHY145Q">AXTWEN</a>).
<h3>The Influence Of New Product Launches</h3>
Thanks in part to a spate of new product launches this year, the number of inverse and leveraged ETFs around the world has rapidly proliferated. At the end of the third quarter, there were 1,068 inverse and leveraged ETFs with over $71 billion in combined assets under management, according to Boost data.
 That is up from 509 such funds with less than $42 billion in combined assets at the end of 2010.
Some new inverse and geared ETFs are proving to be quick successes. For example, the Direxion Daily CSI 300 China A Shares Bear 1X Shares (NYSE: <a class="ticker" href="/stock/chad#NYSE">CHAD</a>) debuted right before Chinese stocks swooned, giving traders good reason to make this ETF one of this year&#39;s<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5891646/bears-backing-away-from-a-shares-could-jolt-this-etf"> most successful rookie funds</a>.
Likewise, traders have been quick to pump cash into the Direxion Daily S&amp;P Biotech Bull 3X Shares (NYSE: <a class="ticker" href="/stock/labu#NYSE">LABU</a>), which debuted in the second quarter, in an effort to catch a rebound in biotech stocks.
At the end of the third quarter, the ProShares Short S&amp;P500 (ETF) (NYSE: <a class="ticker" href="/stock/sh#NYSE">SH</a>) and the ProShares UltraShort S&amp;P500 (ETF) (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>) were the two largest inverse and leveraged equity ETFs with $2.1 billion and $1.7 billion in assets, respectively, according to Boost data. 
Image Credit: <a href="https://pixabay.com/en/analytics-charts-traffic-marketing-925379/">Public Domain</a>

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Direxion Daily 20+ Year Treasury Bear 3X Shares

Volatility Sparks Inflows To Inverse, Leveraged ETFs

Raise your hand if you find yourself longing for the good 'ol days of 2013 right about now.

	You remember, right?

	The days when stocks marched merrily higher on the back of an improving economy, record earnings and a Fed that was about as friendly as they have ever been.

	The days when QE-infinity both here and in the land of the rising sun (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>) meant free money for those that could pull off the "carry trade." And the days when the grass definitely looked greener on the other side of the economic fence.

	Unfortunately, those days are apparently over. Unfortunately, reality has set in and a lot of folks think that stocks got ahead of themselves in 2013. Unfortunately all good things (specifically QE and the Fed's ZIRP) must come to an end. And unfortunately, while no one really expected the heady gains of 2013 to continue unabated, admit it; you were secretly hoping they would.

	See also: <a href="http://www.benzinga.com/general/education/14/04/4472161/is-it-time-for-a-major-correction">Is It 'Time' For A Major Correction?</a>

	No, in 2014 investors are focused on the idea that this bull market is aging, that the central bankers of the world will have to stop the printing presses at some point, and that growth rates around the globe just aren't as strong as they have been in the past.

	Oh, and then there is the fact that year two's of the Presidential cycle have been pretty darned crummy. 

	The Presidential Cycle Says Beware 

	Don't look now fans, but it's almost that time of year again. Yep, that's right; there are just seven more trading days before the month of May begins. And in short, this means that there are just seven more trading days before the "Sell in May and Go Away" season officially commences.

	Lest you've forgotten, until last year, selling in or around May 1 each year had been a very profitable strategy for many, many years. And given that this year is year number two in the Presidential cycle, a great many analysts have been looking for this trade to be effective once again this year. 

	History shows that in year two of a President's term, the S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) has actually fallen by a median of -1.5 percent. However, it is during the second and third quarters of these years that things tend to get ugly as meaningful corrections have had a nasty habit of appearing. 

	The Cycle Composite Says Beware 

	Given that the four-year Presidential Cycle makes up one-third of the cycle composite we use in our work (the other cycles included in the composite are the 1-year and the 10-year), it isn't exactly surprising to see the composite pointing primarily down over the coming five months. 

	In fact, according to the cycle composite, the market should've began going down... wait for it... Tuesday. Yep, that's right, the cycles say that the market should've peaked on April 21 and then move steadily lower - in an annoyingly choppy fashion - until October.

	Below is an image of the cycle projection from April 21 through September: 

	S&amp;P 500 Cycle Projection: April 21 - October 2, 2014 

	<img alt="cycle_april_-_sept.png" height="418" src="/files/images/2014/April/23/cycle_april_-_sept.png" width="397" />

	Looks fun, right? 

	Couple this with the fact that the cycles have been pretty spot-on for several years running and you've got a reason to run out and start buying some vol (NYSE: <a class="ticker" href="/stock/vxx#NYSE">VXX</a>), raising some cash, selling some covered-calls, or putting on some hedges with an inverse ETF or two (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>). 

	But Wait, There's Good News! 

	However, there is one fact that has been almost entirely overlooked by the media. 

	You see, while 2014 is indeed year two of the Presidential Cycle, it is also - and this is the good part - the sixth year of the current President's term. 

	See also: <a href="http://www.benzinga.com/etfs/broad-u-s-equity-etfs/14/04/4435521/a-tale-of-two-headlines">A Tale Of Two Headlines</a>

	Why should you care about such things, you ask? 

	Although the occurrences are limited, since JFK's Presidency, which began in 1961, the average return for the S&amp;P 500 in the sixth year of a president's term has been 18.3 percent (median 14.6 percent). 

	So, while this bull is growing old and the historical odds would seem to favor the bears for the next few months, there is clearly more than one way to look at history. 

	Here's hoping Ms. Market proves the consensus wrong again in 2014! 

	Positions in stocks mentioned: SPY

Politics

General

Barclays Bank iPath S&P 500 VIX Short-Term Futures ETN

Cycles And Presidential Cycles: Is There A Twist?

Well, that didn&rsquo;t take long! Just a few weeks ago, I wrote an article stating that investors should begin to worry about the lofty level of the stock market. Since that time, the <a data-mce-href="http://www.dailygainsletter.com/sp-500/" href="http://www.dailygainsletter.com/sp-500/" target="_blank">S&amp;P 500</a> has dropped by more than five percent in less than two weeks.

	This market correction won&rsquo;t be a surprise to my readers, as I have been suggesting investment strategies that can help prepare your portfolio for a large downswing in the market for some time now.

	When I wrote the article in late January, the S&amp;P 500 was surging, even though the preliminary Thomson Reuters/University of Michigan index of consumer sentiment dropped month-over-month. Since then, we have seen additional data coming from China showing that its economy is beginning to slow.

	Also Read: <a data-mce-href="http://www.dailygainsletter.com/nyse-stock-market-holidays-schedule/" href="http://www.dailygainsletter.com/nyse-stock-market-holidays-schedule/">NYSE holidays 2014</a>

	The Markit/HSBC China Manufacturing Purchasing Managers&rsquo; Index (PMI) for January was 49.6, much weaker than expected. (A PMI data point below 50 denotes a contraction in activity.) While many analysts have been expecting China to begin accelerating, this recent data is a dose of reality, as manufacturing jobs in China dropped for the third consecutive month. (Source: &ldquo;HSBC China Manufacturing PMI,&rdquo; Markit Economics, January 30, 2014.)

	I know what you&rsquo;re thinking; &ldquo;Why should investors in the S&amp;P 500 care about what happens in China?&rdquo; A market correction doesn&rsquo;t occur based on a single event. When you&rsquo;re trying to develop investment strategies, especially if you are considering the potential for a market correction in a large index, such as the S&amp;P 500, you have to take many factors into account, as if you&rsquo;re working on a jigsaw puzzle.

	First ask yourself, what are the positive and negative drivers in 2014 for the S&amp;P 500?

	Companies, in general, are extremely profitable, this is true, but revenues are not accelerating. Profitability is actually decelerating for the S&amp;P 500 companies.

	This does not mean a market correction will necessarily occur; however, when you consider how high the current valuation is for the S&amp;P 500, we will really need to see an acceleration in economic growth both here and abroad if companies are to increase revenues, which will lead to a stronger bottom-line.

	China and many emerging markets are extremely important for S&amp;P 500 companies. For these stocks, a large part of profits actually comes from outside of America. If countries like China are beginning to falter, who is left to pick up the slack?

	We are clearly seeing that American consumers are tapped out. One retail stock after another has disappointed over the past quarter, and I don&rsquo;t see any reason why we will see a massive increase in consumer spending over the next couple of quarters.

	When you combine all of these macro-economic factors with the fact that the Federal Reserve is continuing to reduce its monetary stimulus, these are large hurdles for the S&amp;P 500 to overcome. In terms of a market correction, as more investors begin to take profits, especially as the Federal Reserve continues pulling back on the money printing throttle, I think it&rsquo;s important to incorporate some investment strategies to hedge your portfolio.

	<a data-mce-href="http://www.dailygainsletter.com/files/2014/02/SP-Large-Cap-Index-Chart.jpg" href="http://www.dailygainsletter.com/files/2014/02/SP-Large-Cap-Index-Chart.jpg" target="_blank"><img alt="S&amp;P Large Cap Index Chart" class="aligncenter" data-mce-src="http://www.dailygainsletter.com/files/2014/02/SP-Large-Cap-Index-Chart.jpg" height="245" src="http://www.dailygainsletter.com/files/2014/02/SP-Large-Cap-Index-Chart.jpg" title="S&amp;P Large Cap Index Chart" width="550" /></a>

	Chart courtesy of www.StockCharts.com

	One of these investment strategies is to use an inverse exchange-traded fund (ETF), such as ProShares UltraShort S&amp;P 500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>). While the S&amp;P 500 has begun this market correction with a five-percent drop over the past month, the UltraShort S&amp;P 500 ETF is up more than 10% during this time.

	Even as the S&amp;P 500 continues and this pullback and possibly an even deeper market correction occur, it&rsquo;s important to incorporate various investment strategies in your portfolio. This certainly does not mean you should put all your eggs in one basket, such as one inverse ETF&mdash;far from it.

	When a sector or specific stock that is a solid, long-term investment encounters a market correction, this is a time to begin adding to your portfolio. But it&rsquo;s also important to add some hedges as part of your investment strategies.

	This article <a data-mce-href="http://www.dailygainsletter.com/stock-market/how-to-prepare-for-the-stock-market-sell-off-ive-been-warning-about/2557/" href="http://www.dailygainsletter.com/stock-market/how-to-prepare-for-the-stock-market-sell-off-ive-been-warning-about/2557/" target="_blank">How to Prepare for the Stock Market Sell-Off I&rsquo;ve Been Warning About</a> was originally published at <a data-mce-href="http://www.dailygainsletter.com/" href="http://www.dailygainsletter.com/" target="_blank">Daily gains Letter</a>

How to Prepare for the Stock Market Sell-Off I've Been Warning About

Every day it seems as though the <a data-ls-seen="1" data-mce-href="http://www.dailygainsletter.com/sp-500/" href="http://www.dailygainsletter.com/sp-500/" target="_blank">S&amp;P 500</a> makes a new high. This strong performance over the past year is creating complacency, as more retail investors are piling into the market.

	However, I would certainly urge caution, especially for any new capital being put to work at these lofty levels. With earnings season upon us, we&rsquo;ve already seen several sectors in the S&amp;P 500 get hit significantly, especially retail stocks.

	We keep hearing about resilience among Americans, but consumer sentiment is not as strong as many analysts believe. This is why I wasn&rsquo;t surprised when retailers disappointed.

	One of the common arguments I hear about the S&amp;P 500 is that the market is not expensive historically. I disagree with this argument, and add that the underlying fundamental strength of the U.S. economy, built on consumer sentiment, is far weaker than most people believe.

	Also Read: <a data-mce-href="http://www.dailygainsletter.com/nyse-stock-market-holidays-schedule/" href="http://www.dailygainsletter.com/nyse-stock-market-holidays-schedule/">NYSE holidays 2014</a>

	Regarding the valuation level of the overall stock market, best represented by the S&amp;P 500, an interesting data point comes from Professor Robert Shiller of Yale University, whose research shows that U.S. stocks currently trade at a 25.4 multiple of the cyclically adjusted price-to-earnings ratio&mdash;far above the historical average. (Source: The Economist, January 4, 2014.)

	Now, it would make sense for investors to pay a premium for S&amp;P 500 companies if the economy and consumer sentiment were accelerating, But this is not the case.

	Profit growth by the S&amp;P 500 companies is decelerating. For the third quarter, total profits by corporations in America were $39.2 billion, down from a $66.8-billion increase in corporate profits during the second quarter. (Source: Ibid.)

	Not only are companies within the S&amp;P 500 experiencing a deceleration in corporate profits, but revenues remain stagnant or are declining in some sectors, and consumer sentiment appears to be trailing off, as well.

	The preliminary Thomson Reuters/University of Michigan index of consumer sentiment fell from 82.5 in December to 80.4 in January. Most economists believed the January number would be 83.5. (Source: Bloomberg, January 17, 2014.)

	This 20-year chart shows the S&amp;P 500 and the University of Michigan index of consumer sentiment (solid line).

	<a data-mce-href="http://www.dailygainsletter.com/files/2014/01/SP-500-Large-Cap-Index-Chart1.jpg" href="http://www.dailygainsletter.com/files/2014/01/SP-500-Large-Cap-Index-Chart1.jpg" target="_blank"><img alt="S&amp;P 500 Large Cap Index Chart" class="aligncenter" data-mce-src="http://www.dailygainsletter.com/files/2014/01/SP-500-Large-Cap-Index-Chart1.jpg" height="245" src="http://www.dailygainsletter.com/files/2014/01/SP-500-Large-Cap-Index-Chart1.jpg" title="S&amp;P 500 Large Cap Index Chart" width="550" /></a>

	Chart courtesy of www.StockCharts.com

	The S&amp;P 500 is currently far above its previous peaks, yet consumer sentiment has not even reached the peak of 2013, let alone levels reached last decade.

	In fact, when you consider where consumer sentiment was in the mid-90s, I think it really speaks to how the average American felt during that decade versus the last few years.

	I don&rsquo;t believe that, with stagnant consumer sentiment, flat or declining corporate revenues, and decelerating corporate profits, the S&amp;P 500 can continue rising at the pace we have been witnessing for much longer.

	I&rsquo;ve repeatedly stated that much of the increase over the past couple of years has been primarily related to the Federal Reserve&rsquo;s monetary policy actions. We are now at a turning point, and the Fed is beginning to pull back.

	I believe we are setting up for a very volatile 2014, as changes in monetary policy will create re-pricing (a sell-off) of the S&amp;P 500.

	One way to help protect your portfolio is to invest a small amount in a hedge vehicle, such as an inverse exchange-traded fund (ETF). The ProShares UltraShort S&amp;P 500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>) is one such ETF, which moves up in value as the S&amp;P 500 moves down, although it is better for shorter periods.

	Can the party continue?

	If the Fed continues printing money, this might occur for some time, but the party will eventually end unless fundamentals improve. Unfortunately, I don&rsquo;t see any sign that this is happening.

	This article <a data-mce-href="http://www.dailygainsletter.com/stock-market/why-this-chart-should-worry-investors/2426/" href="http://www.dailygainsletter.com/stock-market/why-this-chart-should-worry-investors/2426/" target="_blank">Why This Chart Should Worry Investors</a> was originally published at <a data-mce-href="http://www.dailygainsletter.com/" href="http://www.dailygainsletter.com/" target="_blank">Daily Gains Letter</a>

Why This Chart Should Worry Investors

&nbsp;

	 
	By&nbsp;<a data-ls-seen="1" href="http://www.dailygainsletter.com/author/sasha-cekerevac/" rel="author" style="background-color: rgb(255, 255, 255); font-family: Verdana, Arial, Geneva, sans-serif; font-size: 12px; line-height: 16px;" title="Posts by Sasha Cekerevac">Sasha Cekerevac</a>


	 
	As many of you already know, the gross domestic product (GDP) estimate for the third quarter came in above estimates at 3.6%, with most of the increase coming from higher inventory levels.


	 
	But I would like to look at something slightly different than the inventory buildup. I think we are all aware of what happens when inventory builds and consumers don&rsquo;t buy&mdash;<a data-ls-seen="1" data-mce-href="http://www.dailygainsletter.com/corporate-profits/" href="http://www.dailygainsletter.com/corporate-profits/" style="font-size: 13px; line-height: 19px;" title="corporate profits">corporate profits</a>&nbsp;get hit. However, looking at the data a bit closer, there are more worrisome signs aside from excess inventory that are also pointing to tough times ahead for corporate profits.


	 
	The&nbsp;<a data-ls-seen="1" data-mce-href="http://www.dailygainsletter.com/sp-500/" href="http://www.dailygainsletter.com/sp-500/" title="S&amp;P 500">S&amp;P 500</a>&nbsp;has had a stellar run since its bottom in 2009. Part of the reason for this is that corporate profits have expanded tremendously as firms cut costs through massive layoffs, as well as lower financing payments through the cheap money provided by depressed&nbsp;<a data-ls-seen="1" data-mce-href="http://www.dailygainsletter.com/interest-rates/" href="http://www.dailygainsletter.com/interest-rates/" title="interest rates">interest rates</a>. But this might be coming to a close, as corporate profits for S&amp;P 500 companies appear to be peaking.


	 
	According to the latest data from the U.S. Department of Commerce, third-quarter corporate profits on an after-tax basis were a record 11.1% as a share of GDP. (Source: &ldquo;National Income and Product Account, GDP 3rd Quarter 2013,&rdquo; U.S. Department of Commerce, December 5, 2013.)


	 
	What this means is that the S&amp;P 500 companies are generating extremely high profit margins. Obviously, this alone is not bad; however, business is always cyclical. We will always move from peaks to troughs, and corporate profits and margins are no exception.


	 
	Wall Street analysts continue to tell people that the S&amp;P 500 is a buy, because they are taking the data from the past couple of years showing growth in corporate profits and extrapolating it out over the next couple of years.


	 
	The problem is that the way firms have generated growth in corporate profits is eroding. Over the past year, companies are actually beginning to hire new workers, albeit at a relatively slow pace. The net result is higher costs. Interest rates are beginning to move upward, too; again, this is a higher cost.


	 
	Revenues are not accelerating for S&amp;P 500 companies. Most of the growth in corporate profits came from cost-cutting, not revenue growth.


	 
	Many analysts continue to believe corporate profits will grow 10%&ndash;15% next year, but if revenues are not increasing and costs are beginning to rise, this simply doesn&rsquo;t add up.


	 
	Even the growth in corporate profits for S&amp;P 500 companies is beginning to decelerate. Domestically, corporate profits generated by non-financial companies in the third quarter increased to $13.0 billion, a much lower level than the $37.8 billion of corporate profits generated in the second quarter.


	 
	I think we are already witnessing a deceleration in corporate profits, and many investors and analysts are far too optimistic in their belief that the S&amp;P 500 companies can continue driving growth to the bottom line.


	 
	<a data-mce-href="http://www.dailygainsletter.com/files/2013/12/SP-500Large-Cap-Index-Chart.jpg" href="http://www.dailygainsletter.com/files/2013/12/SP-500Large-Cap-Index-Chart.jpg" target="_blank"><img alt="S&amp;P 500Large Cap Index Chart" data-mce-src="http://www.dailygainsletter.com/files/2013/12/SP-500Large-Cap-Index-Chart.jpg" height="344" src="http://www.dailygainsletter.com/files/2013/12/SP-500Large-Cap-Index-Chart.jpg" style="cursor: default;" title="S&amp;P 500Large Cap Index Chart" width="550" /></a>


	 
	Chart courtesy of www.StockCharts.com


	 
	As the S&amp;P 500 has recently continued moving higher, another worry for me is a negative divergence between the index and the moving average convergence/divergence (MACD) indicator. Essentially, the momentum appears to be decreasing, even as the S&amp;P 500 moves higher. This doesn&rsquo;t necessarily mean that the S&amp;P 500 has made a top, but it is yet another worrisome sign for investors at these lofty levels.


	 
	For those investors who believe that the S&amp;P 500 might pull back and want to profit over the short term, I would look to such inverse exchange-traded funds (ETF) as the ProShares Ultra Short S&amp;P500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>), which moves up as the S&amp;P 500 moves down.


	 
	This particular ETF seeks for an inverse of two times the return of the S&amp;P 500 on a daily basis. Over the long term, leveraged ETFs will not mimic their specific indices in such a manner, but as short-term hedges, they might be suitable, depending on each investor&rsquo;s risk profile.


	 
	This article&nbsp;<a data-mce-href="http://www.dailygainsletter.com/stock-market/what-wall-street-is-forgetting-in-corporate-profits/2245/" href="http://www.dailygainsletter.com/stock-market/what-wall-street-is-forgetting-in-corporate-profits/2245/" target="_blank">Profit Play on the Great Disappearing &ldquo;Corporate Earnings Growth&rdquo; Act</a>&nbsp;was originally published at&nbsp;<a data-mce-href="http://www.dailygainsletter.com" href="http://www.dailygainsletter.com/" target="_blank">Daily Gains Letter</a>

Profit Play on the Great Disappearing "Corporate Earnings Growth" Act

The S&amp;P 500 may be entering bubble-like territory: that&rsquo;s what I&rsquo;ve been writing for the past few months.

	Now, it appears as though I&rsquo;m not the only one who&rsquo;s worried about asset classes beginning to form bubbles from the excess money printing. 2013 Nobel Prize-winner Robert Shiller also recently stated that he is concerned that prices have risen far too quickly across many asset classes, from real estate to stocks.

	As I&rsquo;ve written several times over the past couple of months, investing in stocks at these elevated levels is quite risky. My belief is that much of the upward move in the S&amp;P 500 has been primarily based on the liquidity (money printing) being pumped by the <a data-mce-href="http://www.investmentcontrarians.com/federal-reserve/" href="http://www.investmentcontrarians.com/federal-reserve/" target="_blank">Federal Reserve</a>.

	Investing in stocks with this premise can only work for the very short-term trader who&rsquo;s quick enough to get out when the tide begins to turn.

	Also Read: <a data-mce-href="http://www.investmentcontrarians.com/nyse-2013-stock-market-holidays/" href="http://www.investmentcontrarians.com/nyse-2013-stock-market-holidays/">NYSE Holidays 2014</a>

	Because people are not investing in stocks based on actual fundamentals right now, one can&rsquo;t expect the value in the S&amp;P 500 to remain elevated once there&rsquo;s a change in monetary policy, since much of the move has been artificially supported.

	Let&rsquo;s take a look at how the S&amp;P 500 has been affected by monetary policy over the past few years, and how investing in stocks at the current level is becoming increasingly risky.

	<a data-mce-href="http://www.investmentcontrarians.com/files/2013/12/SP-Large-Cap-Index-Chart.jpg" href="http://www.investmentcontrarians.com/files/2013/12/SP-Large-Cap-Index-Chart.jpg" target="_blank"><img alt="S&amp;P Large Cap Index Chart" data-mce-src="http://www.investmentcontrarians.com/files/2013/12/SP-Large-Cap-Index-Chart.jpg" height="259" src="http://www.investmentcontrarians.com/files/2013/12/SP-Large-Cap-Index-Chart.jpg" title="S&amp;P Large Cap Index Chart" width="570" /></a>

	Chart courtesy of www.StockCharts.com

	The first quantitative easing program by the Federal Reserve lasted from December 2008 until March 2010. This period is not shown on the chart above, as one could argue that the S&amp;P 500 became extremely oversold and that investing in stocks for the long-term made sense at that point, regardless of the Federal Reserve&rsquo;s policy.

	The second round of quantitative easing (QE2) by the Federal Reserve began in November 2010 and lasted until June 2011. As you can see in the chart above, following the completion of the Federal Reserve&rsquo;s QE2 in the summer of 2011, the S&amp;P 500 sold off into the fall.

	&ldquo;Operation Twist&rdquo; began during the end of September 2011 and was originally scheduled to end in June 2012. However, the Federal Reserve extended this program until the end of 2012.

	And finally, we get to the third round of quantitative easing (QE3) by the Federal Reserve, which began in September of 2012 with the purchase of $40.0 billion per month of mortgage-backed securities. In December of 2012, the Federal Reserve expanded QE3 to include the purchase of $45.0 billion per month of Treasury securities.

	Investing in stocks throughout this time period clearly benefited shareholders, as the Federal Reserve pumped an exorbitant amount of new money into the market. The S&amp;P 500 continued to power higher, only selling off when each monetary policy initiative was completed.

	To keep the S&amp;P 500 moving higher, each time monetary policy was set to end, the Federal Reserve stepped in and pumped more money into the system.

	I&rsquo;m certainly not suggesting one should sell every single share and sit in cash only; in fact, cash is the worst investment to make during a time when the Federal Reserve is printing money like crazy, because inflation will begin to eat away at your wealth over the next decade.

	What I am suggesting is that a portfolio needs to be diversified to include hedges against both a sell-off in the S&amp;P 500 and the negative effects of money printing.

	Investors may want to look at investing in stocks in sectors that still have value, while also adding precious metals, such as gold and silver, to their portfolios. Investing a small portion of your portfolio in an inverse exchange-traded fund (ETF), such as the ProShares Ultra Short S&amp;P500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>), which moves up in value as the S&amp;P 500 moves down, may also be a wise play.

	This article <a data-mce-href="http://www.investmentcontrarians.com/stock-market/the-best-and-worst-investment-strategies-to-battle-coming-inflation/3406/" href="http://www.investmentcontrarians.com/stock-market/the-best-and-worst-investment-strategies-to-battle-coming-inflation/3406/" target="_blank">Best Investment Strategies to Battle Coming Inflation</a> was originally published at <a data-mce-href="http://www.investmentcontrarians.com/" href="http://www.investmentcontrarians.com/" target="_blank">Investment Contrarians</a>

Best Investment Strategies to Battle Coming Inflation

After so many years following the Great Recession, it&rsquo;s still quite astounding that job creation remains so slow. This obviously indicates the lack of <a data-mce-href="http://www.investmentcontrarians.com/economic-growth/" href="http://www.investmentcontrarians.com/economic-growth/" target="_blank">economic growth</a>, even after trillions of dollars have been pumped into the U.S. economy.

	While there has been a lot of optimistic talk in the mainstream media, there have been an increasing number of data points indicating America&rsquo;s economic growth is still very fragile.

	Recently, the Federal Reserve Bank of New York released the results of its November 2013 &ldquo;Empire State Manufacturing Survey,&rdquo; and they didn&rsquo;t support the economic growth theory.

	This report is an indication of the state of manufacturing in New York. The net result is that overall business conditions fell to their first negative reading since May. New orders also fell 13 points into negative territory at -5.5. Labor conditions worsened, indicating a decline in the average number of hours worked per week. (Source: &ldquo;Empire State Manufacturing Survey,&rdquo; Federal Reserve Bank of New York web site, November 15, 2013.)

	Also Read: <a data-mce-href="http://www.investmentcontrarians.com/nyse-2013-stock-market-holidays/" href="http://www.investmentcontrarians.com/nyse-2013-stock-market-holidays/">NYSE Holidays 2014</a>

	It&rsquo;s no wonder that job creation is still lagging: the manufacturing industry is still experiencing a lack of economic growth. In fact, these results indicate that manufacturing is beginning to weaken once again.

	We can&rsquo;t have economic growth if large sectors of the U.S. economy are experiencing a decline in business activity.

	On top of the decline in manufacturing, the level of prices paid is beginning to increase to a level above what firms are able to charge clients.

	In 2013, prices paid by manufacturing firms increased 3.4% on average, and they are expected to increase four percent in 2014. Manufacturing firms estimate that they can only increase prices charged to customers by 1.8% in 2014.

	So not only is the manufacturing sector witnessing weak economic growth, but profit margins will be under pressure as input costs are rising faster than the price consumers are willing to pay; this means businesses will incur those costs.

	In this scenario, I think it is very unlikely that we will see a huge boom in job creation like the one the mainstream is trying to sell. If you are a business owner of a manufacturing firm looking at this data, would you really begin hiring new employees en masse? I certainly wouldn&rsquo;t.

	But while we are seeing many signs of a lack of economic growth and relatively muted job creation, the stock markets continue to power higher. This has been my worry for some time, that investors are putting all their hope into the possibility that economic growth will emerge without really looking at the data.

	<a data-mce-href="http://www.investmentcontrarians.com/files/2013/11/SP-500-SPDRs-Chart.jpg" href="http://www.investmentcontrarians.com/files/2013/11/SP-500-SPDRs-Chart.jpg" target="_blank"><img alt="S&amp;P 500 SPDRs Chart" data-mce-src="http://www.investmentcontrarians.com/files/2013/11/SP-500-SPDRs-Chart.jpg" height="253" src="http://www.investmentcontrarians.com/files/2013/11/SP-500-SPDRs-Chart.jpg" title="S&amp;P 500 SPDRs Chart" width="570" /></a>

	Chart courtesy of www.StockCharts.com

	With this in mind, it might be wise for investors to hedge against a possible correction in the absence of economic growth. One way to hedge a portfolio is through the use of an inverse exchange-traded fund (ETF), such as ProShares UltraShort S&amp;P500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>), which moves two times the inverse of the S&amp;P 500.

	As you can see in the chart above, this ETF (solid black line) moves down when the S&amp;P 500 (red and black line) moves up; when the stock market sells off, the ETF goes up.

	One note of caution: this ETF can be very volatile, which means that this type of strategy should only be used by seasoned investors and with only a small portion of funds for hedging purposes.

	No one can predict the top of a market, but in my opinion, we&rsquo;re in the late innings. Taking appropriate steps to hedge one&rsquo;s portfolio, or at least partially, is a prudent strategy at this point.

	This article <a data-mce-href="http://www.investmentcontrarians.com/stock-market/news-survey-shows-downturn-in-manufacturing/3331/" href="http://www.investmentcontrarians.com/stock-market/news-survey-shows-downturn-in-manufacturing/3331/" target="_blank">Economic Recovery Doubtful as New Survey Shows Downturn in Manufacturing</a> was originally published at <a data-mce-href="http://www.investmentcontrarians.com/" href="http://www.investmentcontrarians.com/" target="_blank">Investment Contrarians</a>

Forex

Economics

Federal Reserve

Economic Recovery Doubtful as New Survey Shows Downturn in Manufacturing

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The United States is currently not the top country in the world for business&mdash;wait, hold on; how can that be true? Isn&rsquo;t America the most powerful nation in the world?

	Well, according to Donald Trump, America is losing its business advantage amid a declining <a data-mce-href="http://www.investmentcontrarians.com/u-s-economy/" href="http://www.investmentcontrarians.com/u-s-economy/" target="_blank">U.S. economy</a>. In an interview with CNBC&rsquo;s Piers Morgan last Thursday, Trump went on and blamed China, India, and Mexico for the country&rsquo;s demise, saying American jobs have been stolen by these countries, thereby negatively impacting the U.S. economy.

	While I agree with Trump that the loss of jobs in this country is a major issue, I wouldn&rsquo;t go as far as to lay the blame 100% on these countries. Hey, the global economy is forever interconnected. All countries do what they can to move ahead. It&rsquo;s no different with China, India, and Mexico. They have a major cost advantage in cheap labor and manufacturing space, so they take advantage of it. That&rsquo;s just the basis of competitive advantage between countries.

	Countries focus on their advantages, whether it&rsquo;s labor, technology, or an easy business climate. For Trump to squarely lay the blame for the decline of the U.S. economy on just three countries is the easy way out.

	Yes, it&rsquo;s not relatively cheap to manufacture in the U.S. economy, as far as the labor costs and business incentives go, compared to the emerging markets, where you have people willing to work for $10.00 a day and in some of the worst working environments found. It&rsquo;s not good, but that&rsquo;s the reality.

	With the massive and overdone quantitative easing by the Federal Reserve and the massive spending and mounting of the national debt, things must change; otherwise, investors could end up investing in an aging America and a soft U.S. economy that is seeing minimal growth.

	In the annual report Economic Freedom of the World by Canadian-based Fraser Institute, good old America was ranked 17th in the world in economic freedom. (Source: &ldquo;Canada Continues to Lead the United States in Economic Freedom While Hong Kong Again Tops Global Rankings,&rdquo; The Fraser Institute, September 18, 2013.)

	The report stated, &ldquo;Unfortunately for the United States, we&rsquo;ve seen overspending, weakening rule of law, and regulatory overkill on the part of the U.S. government, causing its economic freedom score to plummet in recent years. This is a stark contrast from 2000, when the U.S. was considered a bastion of economic freedom and ranked second globally.&rdquo;

	The current impasse and bickering in Washington is proof of what the report found. The ability of the U.S. economy to deliver requires far less political intervention in favor of a more proactive approach to developing businesses and providing a business climate that encourages growth and innovation in the U.S. economy.

	You cannot simply blame other countries for your misfortune. Sometimes, we just have to take what we are given and focus on building the U.S. economy into a more viable structure. If the U.S. economy&rsquo;s decline continues, you may want to look at shorting U.S. stocks or exchange-traded funds (ETFs) that derive the majority of their revenues domestically; you could also consider buying ETFs that play a downturn in the U.S., such as ProShares Short S&amp;P 500 Fund (NYSE: <a class="ticker" href="/stock/sh#NYSE">SH</a>), ProShares UltraShort S&amp;P 500 Fund (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>), or ProShares UltraShort Dow 30 Fund (NYSE: <a class="ticker" href="/stock/dxd#NYSE">DXD</a>).

	This article <a data-mce-href="http://www.investmentcontrarians.com/recession/why-americas-the-only-one-to-blame-for-its-decline/3133/" href="http://www.investmentcontrarians.com/recession/why-americas-the-only-one-to-blame-for-its-decline/3133/" target="_blank">Why America&rsquo;s the Only One to Blame for Its Decline</a> was originally published at <a data-mce-href="http://www.investmentcontrarians.com/" href="http://www.investmentcontrarians.com/" target="_blank">Investment Contrarians</a>

Why America's the Only One to Blame for Its Decline

Here are some notable ETFs worth taking a look at for Friday, October 11, 2013.

	PowerShares Media ETF (NYSE: <a class="ticker" href="/stock/pbs#NYSE">PBS</a>)

	On Thrusday, John Malone of Liberty Media (NASDAQ: <a class="ticker" href="/stock/lmca#NASDAQ">LMCA</a>) made comments regarding the television industry and it sent the sector higher. He mentioned the monetization possibilities and he believes there are new forms of content distribution out there.

	The ETF has several television/cable companies in the top ten holdings and benefited from Malone’s comments. The ETF has been one of the strongest and most consistent of the sector ETFs and it appears that trend will continue.

	iShares U.S. Financials ETF (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>)

	Before the opening bell today, Wells Fargo &amp; Co (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>) and JP Morgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>)will report quarterly earnings. It will be the first look into how the large U.S. financial stocks performed last quarter.

	The news should have an affect on the sector as well as the overall market. With WFC being the number two holding and JPM a top holding of IYF, expect the ETF to trade in the direction of the stocks.

	iShares MSCI Poland Investable Market ETF (NYSE: <a class="ticker" href="/stock/epol#NYSE">EPOL</a>)

	Take this fact to your happy hour after work today. Ask which country ETF hit a new multi-year high this week? Well of course the answer is Poland. EPOL was up 4.6 percent on Thursday to close at the best level in two years. The country was able to avoid the major Western Europe financial crisis a few years ago and has also sidestepped the most recent emerging market drubbing.

	The country is expected to grow by two percent in 2013, three percent in 2014, and meet its long-term growth rate of four percent going forward. The ETF is up two percent in 2013, lagging its peers and has more upside potential. Its competitor is the Market Vectors Poland ETF (NYSE: <a class="ticker" href="/stock/plnd#NYSE">PLND</a>), which is up five percent this year.

	ProShares UltraShort S&amp;P 500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>)

	When investors panic and they make emotional decisions the first move is typically not the smartest choice. The fear spiked yesterday for investors and a large number turned to leveraged inverse ETFs to product their portfolios. The extremely popular SDS is often the ETF of choice and once again the emotional decision was the wrong option.

	The ETF was down 4.3 on Thursday as the market rallied. It will be interesting to see if the ETF can bounce back and the market gives back some gains today. Keep an eye on SDS, but at the same time proceed with caution for all leveraged and short ETFs.

Emerging Market ETFs

iShares MSCI Poland Investable Market Index Fund ETF

EPOL

iShares Dow Jones US Financial Sector Index Fund

LMCA

PLND

ETF Outlook for October 11, 2013 (PBS, EPOL, SDS, IYF)

Here is the ETF Professor's ETF Watch List for Friday, August 30, 2013.

Keep an eye on the PowerShares DB Crude Oil Double Short ETN (NYSE: <a class="ticker" href="/stock/dto#NYSE">DTO</a>).

The ProShares UltraShort S&amp;P 500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>) should be monitored.

Give the First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>) a look.

The Market Vectors Junior Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdxj#NYSE">GDXJ</a>) should be in play, as always.

Emerging markets plays of the day: iShares MSCI Chile ETF (NYSE: <a class="ticker" href="/stock/ech#NYSE">ECH</a>), iShares MSCI Taiwan ETF (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>) and the Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>).

Forex play of the day: CurrencyShares Canadian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxc#NYSE">FXC</a>).

Bond play of the day: Vanguard Short-Term Bond ETF (NYSE: <a class="ticker" href="/stock/bsv#NYSE">BSV</a>).

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